Summer 2010
Market Commentary
The equity market has seen recent significant declines regarding the Greek debt crisis. Confidence in the European Union’s response to the crisis and their ability to shore up the fragile finances of Portugal and Spain has disintegrated. The riots in Greece over austerity measures to bring the country’s finances under control were a wake-up call for the market on the difficulty of dealing with significant government deficits.
Why would the US equity market decline over concern about whether Greece can pay its bills?
continuePension Plan Limitations for 2010
| 401(k) Maximum Participant Deferral | $16,500* |
| Defined Contribution Maximum Annual Addition | $49,000 |
| Highly Compensated Employee | $110,000 |
| Annual Compensation Limit | $245,000 |
*$22,000 for those age 50 or over, if plan permits
Retirement Plan Sponsors List 2010 Priorities
Plan sponsors’ top two priorities for this year are encouraging employees to be accountable for their own future and enhancing employees’ understanding of their future retirement benefits, according to the survey results in Hewitt Associates' Hot Topics in Retirement 2010. An additional focus will be to help employees to retire with enough savings.
continueSavers Confused by Target-date Funds
Investors holding target-date funds with other funds may have a “potentially inferior portfolio” in terms of the risk/reward spectrum, according to research by the Employee Benefit Research Institute (EBRI). Savers could end up with more assets in certain sectors of the market than the target-date fund managers had planned.
continueAmericans Are Confident in Retirement Plans
A large majority of Americans were confident in their retirement plans and their investment options in late 2009, according to the Investment Company Institute’s (ICI) Enduring Confidence in the 401(k) System: Investor Attitudes and Actions report.
Nearly 78 percent of those surveyed said they are confident that retirement plan accounts help people achieve their retirement goals. Even larger majorities supported key retirement plan features such as tax advantages, payroll deduction, and individual choice and control.
Overall, 85 percent of those saving in a defined contribution plan agreed that their plans offer a good menu of investment choices. Nearly 100 percent said that it is important to them to have choice in, and control of, their retirement plan investments.
Annual Disclosure Document Available for Managed Plans
The Form ADV Part II is an annual disclosure document that provides information on the various aspects of StanCorp Investment Advisers’ business, the qualifications of the senior officers and the fee structures for the various client types.
continueStreamlined prospectus access
We have recently streamlined access to mutual fund prospectuses and other regulatory documents filed by fund companies through the HTML fact sheets on our participant online account management tool, Personal Savings Center. This new capability provides direct access to a summary prospectus, if available, and the statutory prospectus from the fund fact sheets.
Plan Sponsors Ask...
Is there research addressing the effect of educational level on retirement plan participation?
Yes. The Employee Benefit Research Institute (EBRI) research found that workers with lower educational achievement had lower levels of participation in retirement plans. Also, educational attainment was strongly related to pay.
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The Mainspring in Motion quarterly newsletter for retirement plan sponsors features market commentary, regulatory and legislative updates, product enhancement announcements and articles on retirement readiness, savings, participant behavior and improving plan effectiveness.
Plan Sponsor Quarterly Calendar
Consult your plan's counsel or tax advisor regarding these and other items that may apply to your plan.
July
Conduct a review of second quarter payroll and plan deposit dates to ensure compliance with the Department of Labor’s rules regarding timely deposit of participant contributions and loan repayments.
Verify that employees who became eligible for the plan between April 1 and June 30 received and returned an enrollment form. Follow up on forms that were not returned.
Ensure the plan’s Form 5500 is submitted by July 31, unless an extension of time to file applies (calendar year plans).
August
Begin preparing for the distribution of the plan’s Summary Annual Report to participants and beneficiaries by September 30, unless a Form 5500 extension of time to file applies (calendar year plans).
Submit employee census and payroll data to the plan’s recordkeeper for mid-year compliance testing (calendar year plans).
Confirm that participants who terminated employment between January 1 and June 30 elected a distribution option for their plan account balance and returned their election form. Contact those whose forms were not received.
September
Send a reminder memo or e-mail to all employees to encourage them to review and update, if necessary, their beneficiary designations for all benefit plans.
Begin preparing the applicable safe harbor notices to employees, and plan for distribution of the notices between October 2 and December 2 (calendar year plans).
Distribute the plan’s Summary Annual Report by September 30 to participants and beneficiaries, unless an extension of time to file Form 5500 applies (calendar year plans).
